Yen Recovers As Nikkei Knocked Down By Poor GDP

 | Nov 17, 2014 01:31AM ET

The Japanese is trying to recover as poor GDP data knocks down Nikkei. Q3 GDP unexpectedly contracted -0.4% qoq versus expectation of 0.5% qoq growth. That means, Japan slide back into technical recession with a deeper -1.8% qoq contract back in Q2. GDP price index rose 2.1% yoy versus expectation of 1.9% yoy. Nikkei is down more than -2% at the time of writing and is having 17000 handle in sight.. An economic adviser of prime minister Shinzo Abe noted that the slide in the economy was "shocking" and it's not a situation to debate another sales tax hike any more. He noted it should be time to focus on how to support the economy. Today's GDP data would solidify the case for Abe to postpone the next planned sales tax hike in October 2015. Abe might hold a press conference this week to announce the decision, which might come with a early election to secure the support for this decision.

New Zealand dollar, surges on better than expected retail sales, which showed 1.5% qoq growth in Q3 versus consensus of 0.8% qoq. New Zealand finance minister Bill English said that NZD/USD at mid-to-high 70s is sustainable for the economy. He noted that recent depreciation in the currency had "quite a positive impact" on exporters' productivity and competitiveness. And that would promote a more profitable export sector and a more diverse one. Meanwhile, he also noted that the country could have 3% growth for the next three or four years. NZD/USD rises to as high as 0.7974 so far today. Strong support was seen around 0.7682 (2013 low). We'd likely seen further rebound in the pair for 0.8034 and above.